AmerisourceBergen Corporation Settles False Claims Act Case Involving Adulterated Drugs for $625 Million

PRESS RELEASE

Contact: Patricia Stamler - (248) 335-5000 - [email protected]

Date: October 3, 2018

Patricia Stamler of Hertz Schram PC announced today the $625 million civil settlement under the False Claims Act lawsuit between her clients Daniel Sypula and Kelly Hodge (Relators) and Defendant AmerisourceBergen Corporation and several of its subsidiaries ("AmerisourceBergen"); the United States of America, acting through the United States Attorney's Office for the Eastern District of New York and on behalf of the Office of Inspector General of the Department of Health and Human Services ("HHS") and numerous States. Also, in September 2017, AmerisourceBergen's subsidiary previously pleaded guilty to a criminal charge of distributing misbranded drugs and paid a $260 million-dollar criminal fine to the United States.

AmerisourceBergen operated an illegal Pre-Filled Syringe Program that repackaged the following drugs: Procrit®, Aloxi®, Kytril® and its generic form granisetron, Anzemet® and Neupogen® by removing the drugs from their sterile glass vials, and then placing the drugs into syringes, which created an extra dosage from the overfill. AmerisourceBergen caused numerous false claims to be submitted to the Federal and various States' healthcare programs, including Medicare, Medicaid and TRICARE for: (1) unapproved new drugs; (2) defective drugs (3) adulterated drugs, (3) by causing double billing; and (4) inducing doctors to purchase Procrit® prefilled syringes in exchange for the extra dosages. Some of the settlement funds will be allocated to the various States including Michigan.

Relators Sypula and Hodge filed their claim in 2013 in Detroit, in the United States District Court, Eastern District, Southern Division. In 2014, their case was transferred to the United States District Court, Eastern District of New York, captioned United States ex rel. Daniel Sypula, RPH and Kelly Hodge v. AmerisourceBergen, et al., Civil Action No. 1:14-5278, pursuant to the qui tam provisions of the Federal False Claims Act, 31 U.S.C. § 3730(b) ("FCA") and various analogous states' statutes. The False Claims Act {"Act") allows private persons ("relators") who have knowledge of the submission of false claims (fraud) against a government funded programs to file claims on behalf of the government. If the case is successful, relators are entitled to receive a percentage of the government's recovery. The Act allows for the trebling (tripling) of the single damages the government suffered as a result of the fraud, and the potential for the imposition of civil monetary penalties of between $5,500 and $11,000 or more per false claim submitted and statutory attorney fees. In this case, Relators will receive 16% of the recovery. Relators were represented by Patricia Stamler, partner at Hertz Schram PC.

The United States was represented by Assistant U.S. Attorneys Deborah Zwany and Matt Silverman of the Eastern District of New York and Sanjay Bhambhani of the Commercial Litigation Branch of the U.S. Department of Justice and the States were represented by the various State Medicaid Fraud Control Units.

Department of Justice Press Release